Indian market fell for the second consecutive day in a row on Wednesday pushing benchmark indices towards crucial support levels. The S&P BSE Sensex closed below crucial psychological support at 52,000 while the Nifty50 closed with losses of over 100 points.
Let’s look at the final tally on D-Street – the S&P BSE Sensex was down more than 400 points to 51,703 while the Nifty50 closed with losses of 104 points to 15,208.
Sectorally, the action was seen in the public sector, power, telecom, energy, and industrials while profit-taking was visible in healthcare, IT, finance, banks, and realty stocks.
“The Indian market opened low replicating the weak global trend due to rising bond yield and inflation. PSU banks which were in the limelight on reports of privatisation continued to ride its uptrend,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.
“Mid and small-cap stocks remained firm and outperformed the benchmark indices,” he said.
Here is what experts say investors should do on February 18:
Rohit Singre, Senior Technical Analyst at LKP Securities
The Nifty index opened the day with a gap-down. It formed a bearish candle for the second consecutive day in a row. The index closed the day below its strong support of 15,250, which hints now 15,250 will the immediate hurdle on the higher side.
We may see a good move once the index decisively moves above 15,250 odd levels, and the immediate support is now placed at the 15,140-15,090 zone and resistance is coming near the 15,300-15,380 zone.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research Limited
The market failed to show resilience to stay above the Nifty 50 index level of 15,250 on a sustained basis. While it is subject to further price action evolution, the technical factors have shifted today to support a sideways correction in the future.
The corrective wave down should find support around 15,100-15,150. Traders are advised to refrain from building a new buying position until we witness a breakout of 15,370.
Binod Modi, Head Strategy at Reliance Securities.
The government’s endeavour towards promoting private investment through PLIs and lower taxes provision have gradually started sowing results as a number of companies have already charted their fresh investments, which is also getting accentuated from lower interest rate cycle.
Therefore, in our view, the recent revival in earnings rebound is likely to sustain in subsequent fiscals. However, rise in commodity prices and risk emanating from hardening bold yields could be a medium-term concern.
While we remain positive about the outlook of equities from the long-term perspective, markets may witness some amount of pullback in the near term and rotational trading might be visible.
In our view, infrastructure, industrials, engineering & capital goods, select auto and banks are expected to outperform in the medium term to long term.
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities
Markets have established a medium-term uptrend and are expected to scale 16,000 and higher. In the short term, an extended phase of consolidation is expected.
Immediate support for the index is seen at 15,000, above which, 15,500-15,700 can be tested, while a breach can invite a quick correction.
We suggest accumulating frontline stocks on meaningful corrections. IT, FMCG, and energy stocks look attractive while metals and realty could witness consolidation.
S Hariharan, Head – Sales Trading, Emkay Global Financial Services
Holidays across global markets have led to a slight dip in participation from institutional investors over the last week. Retail participation continues to remain strong though and futures long open interest for retail continued to be slightly above last month at 550k lots.
Financials and energy sectors have been leaders over the last week, while consumer staples & discretionary sectors have been laggards.
Looking ahead, a sharp rise in US Treasury yields and pick up in commodity prices would have negative implications for foreign flow into bonds, and some collateral impact on INR as well. In this context, one can expect more defensive sectors to remain well-bid in the near term.
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